Been trading live for some time now, and the best advice I can give to everyone is “FOREX Traders beware of your broker”.
I will share my experience with the brokers chosen for Live FOREX trading. I will not publish broker names here, as everybody should do their own due diligence and background check on their target broker, and again “FOREX Traders beware of your broker”.
First I chose a broker from Australia, which had the lowest commissions for my platform of choice. The main driver as you can see were the commissions. But don’t be fooled and base your selection on pricing alone.
What I further checked was their online reputation, ability to deposit and withdraw funds with ease, licenses they had been granted, legal regime under which they were operating, location and much more.
I was quite happy with the broker in the beginning but in the end I closed the account because their partner liquidity providers were very thin on European Pairs, causing my strategy to gain losses time after time. Overall the broker was OK, but not exactly what I needed.
For reference I will list below the categories which I use for preliminarily evaluating a FOREX Broker:
- Online reputation, check for any fraud cases or other claims raised by clients all over the world. Don’t consider claims from only a specific location as the underlying problems might be different for each country
- Ability to deposit and withdraw fund with ease, as well as available channels to do so, like e-wallet or bank or any other method which you might be or not familiar with
- Brokers liquidity providers are a good measure to show what you can expect in terms of re-quotes or partial fillings
- Negative balance protection is a must, and as such should be top priority too. There are many cases where brokers have gone after clients because there was no such clause on the T&C, and as a result of sudden moves in the price clients had to cover for Broker loses
- Licenses they have been granted are also an important factor to consider, as it shows that the entity has been properly formed and a good level of due diligence has been performed by the regulatory body
- Legal regime is a nice indication, but I don’t expect every trader to be a lawyer. I’m not a layer too but I understand a demand the broker to have segregated funds as well as deposit protection mandated by the legislation it operates within
So I made the preliminary due diligence and everything checked out fine. As I said above the liquidity was not at optimal levels and made me drop the broker. No complains other than what was expected and again “FOREX Traders beware of your broker”.
Based on the first experience I went after a European broker this time. I decided I had to pay more in commission in order check all the points in Europe. You know things are not so cheap and also much more bureaucratic in the old continent.
I chose one which is based in the UK and Cyprus. Due to passport rights granted to business operating within the EU, you might never know where the entity is primarily based. This broker ticked all the boxes and looked fine.
Funds transferring was not fast, but anyway within the expected limits. Platforms were available and the panel was easy to use. So I’m trading with them for almost six months now.
Then it came the surprise. Three days ago, during the night I saw a lot of orders, more than 50, which were closed. I use automated trading and my first check was on my robots. Whether they had fulfilled the conditions to close those order or not.
None of the conditions for order closure were met, and the same robot, but with different settings was used on multiple pairs. It affected only four pairs. So my suspects went on to the broker with a support case raised on their platform. The broker just came back with a very shallow analysis claiming that my robots had closed the orders.
Well I should have taken more care for my robots to keep logs of their decisions and actions. But I trusted my broker to provide accurate and complete information for all the trading conditions. Apparently this is not the case. I am left now with a consistent loss and with nothing I can fight the broker. So my dear FOREX Traders beware of your broker.
The broker is there to make a profit, and it will not spare you in any case. As a result of incomplete and erroneous information received from the broker, my robots took the wrong decisions.
But one of my favorite quotes is “In three words I can sum up everything I’ve learned about life: it goes on” , and I will move on.
No matter how good the broker is on paper, there will be a time when it will let you down. Don’t despair and move on. Keep fighting and make some money.
Hope you enjoyed this post.
Looking forward to seeing you back soon.